A British trawler has sparked an international incident after being filmed taking a boatload of endangered fish caught in the Norwegian sector of the North Sea and then dumping the majority overboard in UK waters.

Norwegian government coastguards filmed the crew of the Prolific, a Shetland-based trawler, openly discarding more than 5,000 kg of cod and other dead white fish, or nearly 80% of its catch.

According to the coastguard, the boat had previously been inspected in Norwegian waters and declared legal, before crossing into UK waters where it dumped its load. The incident took place on 2 August but the video only came to light in Britain yesterday.

It is illegal to discard fish in Norwegian waters, but boats are forced to do so in European Union waters if they have caught the wrong species of fish or fish that are too small. Last year the EU estimated that between 40% and 60% of all fish caught by trawlers in the North sea is discarded. The practice of dumping is widely recognised as unsustainable but inevitable given the present EU quota system.

Yesterday, Norwegian minister for fisheries and coastal affairs Helga Pedersen, speaking to angry fishing communities in northern Norway who had seen the film, said she would press for review of the EU fishing policy and wanted to ban any boat discarding fish that were caught in Norwegian waters.

"Discarding fish not only means a massive waste of food and potential income, it also leads to unrecorded catches, resulting in a poorer scientific basis for our management decisions", she said. "I want a requirement that all fish caught in Norwegian waters, also by foreign vessels, must be taken to port, regardless of which final port is used. We will introduce new requirements, as a condition for obtaining licenses to fish, that vessels cannot discard valuable fish caught here".

Reidar Kaarbø, an independent analyst of Norwegian government policy said: "This must stop now. The EU community cannot be taken seriously if it allows this kind of behaviour. This is certainly not how to manage the world's resources."

UK fish experts said the practice of discarding fish was common but had rarely been so dramatically documented. Opinions were split on whether the Prolific was discarding fish for which it had no quota, or that it was "high-grading" its catch. This involves boats discarding low-value small fish to make room for high value larger fish.

"It is a disgrace. This practice is depleting populations that are already overfished and it is happening everywhere", said Willie MacKenzie, Greenpeace fisheries campaigner. "All of these fish are perfectly marketable, and have been legally caught. But if you are a fisherman it makes more economic sense to take boat to market with the most saleable fish, so you discard the lowest value stuff."

European Union quotas strictly limit the amount of fish that ships can bring back to port, but there is no restriction on the amount of fish they can catch. The current EU quota system for fish sets quotas at individual species level, which are then allocated and traded amongst individual fishermen. Often they will buy quotas out at sea once they know what they are catching. This means that it is illegal to take back to port fish they have no quota for so these fish are discarded.

The solution, say environment groups, involves an overhaul of fisheries management, making discards illegal, and encouraging more sustainable fishing methods.

Yesterday, the Prolific could not be contacted but the ship's agents, LHD Ltd of Lerwick, said that it was rare for it to fish in Norwegian waters. "It is out of contact. We very rarely fish in Norwegian waters. That's the first time in years," said managing director Richie Simpson. "The reason there are discards is the ridiculously low quotas. Fishermen cannot make a living with them. They are at a ridiculous level."

The International council for the exploration of the sea, the leading scientific body for fisheries scientific, has repeatedly advised the EU that stocks of cod in the North Sea are much too low to be fished and has argued for no-go areas. However, every year the European government ministers override their advice and continue with a quota system.

A spokesman for the department of the environment, food and rural affairs (Defra) said: "Throwing dead fish back into the sea is a waste that nobody wants to see, but there is no easy answer. The UK is keen to ensure more effective and sustainable fisheries by reducing by-catch and discards, and the government is working closely with fishermen to achieve that."